Q&A with Moses Dodo and Fabián Álvarez: The state of digital health in Latin America
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In this Q&A, Fabian Alvarez and Moses Dodo discuss some of the key opportunities and challenges related to virtual care in Latin America.
Moses Dodo serves on Pager’s Advisory Board and has more than 35 years of experience in the healthcare and finance industries. Previously, Dodo served as the Chairman of Bupa Global Latin America, as Executive Director and President of Amedex Bermuda, and as a member of the Board of Directors of HtH Geoblue, a Blue Cross Blue Shield organization that offers IPMI solutions in the United States.
Fabián Álvarez, Vice President of Latin America at Pager, has more than 18 years of experience in health insurance and digital transformation. Prior to his time at Pager, he held various roles in Seguros SURA, a leading integrated delivery network in Colombia.
Fabián Álvarez: What do you believe are some of the key opportunities for the use of virtual care in Latin America? What are some of the use cases that are growing, and what use cases are promising?
Moses Dodo: We can start by discussing the infrastructure in Latin America, which varies a lot between different countries. You have to consider that not just the physical infrastructure in some places is deficient, but that there are also challenges with technological infrastructure as well. Because of this, people had to get accustomed to using a cell phone as their principal tool for a virtual connection.
Although the digital infrastructure is, on one hand, a challenge , it also offers major opportunities because the mobile phone enables us to access data and do things that we were unable to do before. It allows us to take doctors to locations they can’t be physically. Doctors are normally concentrated in urban centers, but who is in the smaller communities, the places farthest from major cities?
“In Latin America, an important part of the population is young and rapidly adopts new technologies, which opens a huge opportunity for the adoption of digital health.”
The virtual care model offers the opportunity to bring primary care to people who don’t have the need or the means to go to a clinic because they live far from it, or in their area there aren’t sufficient doctors. What’s more, it enables them to access higher quality medical care and specialists who they otherwise could not.
Virtual care also enables hospitals in smaller cities to access second medical opinions or high quality specialists who aren’t in their city. This specialist can review a case remotely and provide a solution as if they were in the room. There are challenges, but this is where we are headed.
Finally, it’s important to remember that in Latin America, an important part of the population is young and rapidly adopts new technologies, which opens a huge opportunity for the adoption of digital health.
“We will see how it evolves after COVID-19, but I believe that after permitting the use of telemedicine during the pandemic, there’s no turning back.”
You mentioned a very important point: the differences between countries throughout Latin America. Across the continent, we see significant diversity in a number of different ways.
What are the differences you see between countries in terms of the use of digital services? For those that are evolving more slowly, what barriers exist? For those evolving more quickly, what is enabling them to do so?
That is an excellent question, because people tend to generalize Latin America as if the entire continent were equal, but in reality there is nothing more different than a Mexican, a Brazilian, or an Argentinian, for example. Each country has a distinct situation in terms of infrastructure, regulatory frameworks, and more.
One of the first subjects to analyze is regulation in different countries. Some had the opportunity to adopt new solutions more quickly; telemedicine, for example. Others have larger barriers in the outset because the doctors saw it as something that could alter their traditional market, or they simply didn’t trust the new solution.
The truth is that COVID-19, in one way or another, was a huge accelerator for the introduction of telemedicine, because there simply wasn’t any other choice. In the midst of the pandemic, we had to find a solution, because people had to continue their medical treatments, continue communicating with their doctors – and there was no other solution but to allow some type of digital adoption.
I remember, for example, in the company that I led, at the start of the pandemic when people were in isolation, insurance companies even allowed members to use a telephonic platform, WhatsApp or something less structured, for telemedicine until there was a more organized platform.
I believe that platforms like Pager enable us to create a secure, structured model of primary care that can direct patients to the right care and provide a more simple, appropriate solution.
I also think there is a great possibility that platforms like Pager will drive the use of virtual care. The barriers exist. We will see how it evolves after COVID-19, but I believe that after permitting the use of telemedicine during the pandemic, there’s no turning back.
For example, a very important matter we see today is that of mental health. Psychological consults, in particular, are going to transform. They are transforming more and more into virtual consults, rather than in-person, because in many cases it’s not necessary to be physically in front of a doctor.
I agree with you in that the main factor in digital transformation in healthcare recently has been COVID-19. For example, we’ve seen indicators in the United States in which, at the highest point of the pandemic, 70-80% of healthcare appointments were via virtual platforms. However, as people began to leave their homes again, this level dropped to 20-30%. Do you think this happened in Latin America as well?
Yes, and I think in Latin America as well as in the rest of the world we’re going to see the evolution of telemedicine to what I call telemedicine 2.0: telemedicine with devices.
These healthcare devices allow doctors to access data in real time to see the state of their patients, and this gives patients the security to know that their doctor knows what’s going on with their health outside of the doctor’s office. Medicine and sciences are going to evolve together toward this.
There are many clinical situations in which a person is better off speaking with a doctor or nurse via telemedicine before they go to the emergency room. The worst thing that can happen to the system and to the patient is that the patient’s first step is to go to an emergency room at 3 a.m. The emergency room exists for and has the costs associated with an emergency. If the situation a person has is not an emergency, the system resources are being wasted.
Thinking about the future, what do you think are the primary challenges and barriers for Latin America to arrive at this future of “telemedicine 2.0”?
The biggest challenges are related to the infrastructure in different countries in the region. On the other hand, healthcare systems are very different from one country to another: for example, in Chile the system is almost totally private, whereas in Brazil about 75% of the system is public and 25% is financed by insurers.
Many countries in Latin American have in their constitutions that health is a citizen’s right and a duty of the state, and this puts a lot of pressure on the systems. The governments face a significant challenge to reinvent existing models and create new digital ones. The adoption is slower, the systems older.
“I believe that if you ask 10 general managers of insurance companies what they think about when they go to sleep, their number-one concern would be digital transformation.”
Younger generations are the ones who will put more pressure to help this evolution happen more naturally. For example, if we look at the numbers of large digital commerce companies, like Amazon or MercadoLibre, we see that digital adoption in Latin America has accelerated rapidly during the pandemic.
In the same way, I think that in healthcare, the population has already adjusted to digital models. As we move forward, we can’t expect that a millennial will go to the doctor, receive a bill, pay it, send it to an insurance company by mail, and wait two or three weeks to receive their reimbursement.
I believe that if you ask 10 general managers of insurance companies what they think about when they go to sleep, their number-one concern would be digital transformation.
I think the insurance industry was lagging a little behind, but has now reached the same point as other industries. There can be no more lags, because the member won’t compare one insurer to another. Now, they compare insurers with Amazon, with Apple, and with the experience they had ordering a hamburger.
This is the challenge. Because of this, companies are specializing in healthcare technology – to help healthcare organizations to reach the level of other digital experts in the larger market.
Now, there is a challenge in healthcare that we are seeing with our own clients, and across the entire region. In Latin America, we are experiencing an accelerated demographic change, related to lower birth rates and a higher life expectancy – which translates into higher demand for healthcare services.
What challenges do you think this brings to insurers and providers, and how can we address it?
There’s good news and bad news: the good news is people are living longer lives; the bad news is people are living longer lives.
The issue here is how to manage the cost and the pressure this puts on health systems.
The cost of maintaining life continues to rise rapidly. Medicine has evolved in such a way that some diseases that were previously punctual and fatal have become chronic diseases.
Although the evolution of medicine is good news, when diseases become chronic, the costs are enormous. This is more serious in Latin America and with developing countries, where governments do not have the capacity to continue paying and health systems are burdened with ever-increasing costs.
One way to solve this is through the management of healthcare resources, and digitalization and virtual care systems are there to improve the ability to manage costs. It is also critical that the one who pays the cost of these patients who now have chronic disease, can help them manage their "chronicity".
For example, someone who has diabetes or cancer and whose life expectancy used to be six months or a year, now has five or ten years. How do you manage those five or ten years so that you have the quality of life that you deserve? And how do you ensure that a diabetic, for example, does not develop additional health problems because they don’t control their disease well or don’t adhere to their medications?
All of these challenges are things that digitalization can address almost automatically and with significantly reduced costs.
A study from the OCDE indicates that more than 30% of health spending in Latin America is out-of-pocket payments. How do you think digital transformation can reduce this heavy burden for patients?
There are several reasons out-of-pocket payments exist. In some countries, insurance does not cover medications and there are limitations on coverage, especially in countries where the systems are more covered by the government. In addition, people who have insurance also have copays or deductibles.
Digital care allows insurance companies to incentivize the use of virtual services because they will cost you less than, say, a visit to the emergency room. When someone goes to the emergency room, the cost is very high, and many times it is unnecessary. And of course, the insurer can then offer something that has a lower copay. When the system improves its level of efficiency, the user automatically benefits.
“When the system improves its level of efficiency, the user automatically benefits.”
Do you have a success story of a company that has done it right that you can share?
One of the issues that concerned me in my day-to-day life as CEO of a health insurance company is what we call “waste, fraud and abuse.”
And it's not always because someone had the idea to do something wrong. It could be simply because, for example, you go to a doctor and he sends you ten blood tests. But, you didn't like the doctor, and you decide to go to another one, and they send you the same ten tests again. You don't tell the new doctor that you saw a different doctor before, because you think it’s wrong. In that case, the insurer would have to pay for the tests twice.
I think that the world of healthcare has become a world of specialists, but where the figure of primary care is starting to regain its importance, in one way or another. Digitization allows you to create a model where the person has an immediate response to their concerns without having to go to a doctor or a specialist.
Looking toward the future, how do you imagine the healthcare industry in 10 years?
First, I think that science will continue evolving and advancing. I think the life expectancy of our children and grandchildren will be much higher than that of ours or our parents, and that is good news. The bad news is that we need to identify how to handle this, because medical inflation is going to continue being higher than economic inflation, and this puts a lot of pressure on our systems.
On the other hand, digital transformation is here to stay and it is fundamental that it complements the actions that countries and insurers are taking to face a future that is much more chronic than the one we have today.
We also must discuss medical provision and how it is integrated into a viable product for people with less economic capacity, a product with less choice and more control over where and how the patient accesses care and services.
The structure of costs for a health insurer are divided in how they acquire the member, how they manage the member, and the costs of care, which we call the accident rate.
Platforms like Pager are here to help businesses in two of those important topics. Care, because virtual care is more effective. It allows you to save on those costs and provide your member with a better quality service, as it is digital and more efficient since the doctor or nurse on the other end can be talking to two or three people at the same time.
And surely it allows you to save on accidents, because as we speak, the worst that can happen is that someone goes to an emergency when they don't have to go. The emergency was created for emergencies, not for a headache.
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